Thursday, November 24, 2011

The Survival Period is Upon Us


The quote below is from Richard Russell, a respected member of the investment community. He has been around this business for over 60 years. He's experienced just about every turn of events a market can through at us.

Richard Russell's comments:
 
"My advice: We are moving closer and closer to what I call "survival period" -- the period where the magic of compounding turns into what will be the poison of compounding. This isn't a time for timing. This is a time for action. Reduce your exposure to bonds and all items that provide fixed interest rates. Similarly, reduce your exposure to stocks except the gold miners. Look to expand your positions in inflation-protected assets, especially gold.

Those who are holding stocks in the hopes of the usual rebound are going to be terribly disappointed in the years ahead. This bear market is going to be unlike anything we've ever seen before. In the end my survival vehicle will be gold. I say again, timing is hopeless. Gold will have purchasing power and true wealth as almost everything else is destroyed by this unprecedented bear market. The US Government is now so loaded with ever-growing debt that it has become a mathematical freak. We return to different times, when rising interest rates will eat up the US government. With $55 trillion in assorted debts, the US is in no shape to deal with rising interest rates. We are in a state of reverse compounding, leading to inevitable bankruptcy on a massive scale."

Are you insured? Have you considered gold as wealth insurance? Anyone investing in money markets right now had best have their wits about them.


Gold in New Zealand dollars: $2282.36 per oz
Previous all-time high: $2311.02 per oz (15 Nov, 2011)

Silver in New Zealand dollars: $42.62 per oz
Previous all-time high: $59.19
per oz (30 Apr, 2011)
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